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The IKEA Effect

People tend to value an object more if they contribute to its creation.

The IKEA Effect

Arjun had never been much of a DIY person. When he moved into his new apartment, he decided to buy a bookshelf online. At first, he considered a pre-assembled one, but then he saw a sleek, modern bookshelf that required self-assembly. The instructions seemed straightforward, and the price was reasonable, so he went for it.

The package arrived in a flat box, and as he unpacked the wooden panels, screws, and tiny tools, he felt a mix of excitement and apprehension. The assembly process was anything but smooth—he struggled to align the shelves, inserted a few screws incorrectly, and even had to redo an entire section after realizing he’d placed a panel backward. Hours passed, and frustration built up, but finally, the bookshelf stood tall in his living room.

Exhausted but satisfied, Arjun stepped back to admire his work. It wasn’t perfect—one shelf was slightly misaligned, and there was a tiny scratch from a screwdriver slip—but to him, it was the best bookshelf he had ever owned. When his friend Karan visited and pointed out that he could’ve gotten a sturdier, better-quality bookshelf for the same price, Arjun dismissed the idea. “But I built this one,” he said proudly.

This is the IKEA Effect at play, where people place greater value on something they’ve helped create, even if it has flaws. Arjun’s emotional investment in assembling the bookshelf made him overlook its imperfections and cherish it more than a higher-quality alternative. Businesses use this effect by encouraging customization and self-assembly, enhancing customer satisfaction and attachment to their products.

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Scarcity Bias

Tendency to value limited or scarce resources more highly than those that are abundantly available.

Small Win Bias – Gratification Bias

Tendency to prioritizes or value short-term rewards over long-term benefits.

The Cheating Bias

Dishonest behavior by getting influenced to do so when observing others, leading to unethical practices.

Sisyphus Effect

Tendency to give up when there is no gratification or visible meaning / output to efforts.

Dunning Kruger Effect

Overestimating one’s knowledge due to a lack of understanding about the complexity of a subject.

Decoy Option Effect

Influences preferences by introducing a less attractive intermediate option, subtly steering choices towards more profitable alternatives.

Confirmation Bias

The tendency to search for, interpret, favor and recall information in a way that confirms or supports one’s prior beliefs or values.

Spotlight Effect

The tendency to believe that we are being noticed more than we really are.

Anchoring Bias

People rely heavily on the first piece of information (the “anchor”), even if it’s irrelevant.

Current Mood Bias

It is a distortion in cognition and decision making due to the present emotional state.

Prestige Bias

The tendency to favor the opinions of individuals or groups with higher social status or authority even when not in the same field.

Social Desirability Bias

Tendency to respond to or behave in a way that is socially acceptable or desirable, rather than expressing their true opinions or behaviors.

Recency Bias

The tendency to better recall recent information and events while ignoring older information.

Restraint Bias

The tendency to overestimate the level of control we have over our impulsive behaviors.

Survivorship Bias

The tendency to focus on the individuals or things that have “survived” or succeeded, while overlooking data from those that have not.

Response Bias

Tendency to provide inaccurate or false answers during surveys or interviews.

First impression Bias

The tendency to form lasting opinions based on initial experiences.

Omission Bias

Tendency to avoid taking action due to fear or uncertainty, even when not taking action could be more harmful.

Bundling Bias

The tendency of buying things that are sold together, even if we don’t need everything in the bundle. Think of this as the “package deal effect.”

Distinction Bias

In decision making, we tend to overvalue the minor differences between two almost similar options when we examine them together.

Projection Bias

Individuals overestimate the prevalence of their own thoughts, beliefs, preferences, and knowledge in others.

Salience Bias

Our tendency to focus on items or information that are more noteworthy while ignoring those that do not grab our attention.

Diversification Bias

Spreading our resources thinly across numerous options instead of concentrating on a few.

Pessimism Bias

A tendency to believe things will go wrong even when there is no evidence to support it.

Optimism Bias

Tendency to overestimate the likelihood of positive outcomes and underestimate the negative ones.

Bandwagon Effect

It refers to our habit of adopting certain behaviors or beliefs because many other people do the same.

Framing Bias

Equivalent information can be more or less attractive depending on how it is presented, influencing our decisions.

Recall Bias

Individuals do not accurately remember past events or experiences or leave out details while reporting about them.

Group Think Bias

A group of individuals reaches a consensus without critical reasoning or evaluation of the consequences or alternatives, simply doing or agreeing because everyone else is.